With Ukraine’s proposed law recognizing bitcoin and other cryptocurrencies, the stage is set for the country to become a leader in the market.
The Verkhovna Rada of Ukraine has approved the country’s proposed law “On Virtual Assets” with the recommendations of the president. Two hundred and seventy two People’s Deputies voted for this decision.
As you may recall, on September 8, 2021, the Verkhovna Rada adopted this document in its reading. However, on October 5, the president of Ukraine, Volodymyr Zelensky, vetoed it and returned the document to the Verkhovna Rada along with his suggestions. In particular, the president opposed the creation of a separate regulator for the virtual asset market. Instead, the head of the country proposed to entrust the relevant functions to the already-existing regulator of financial markets.
Ukraine is becoming the locomotive of the global Bitcoin market. The country records a massive volume of transactions with crypto assets, estimated at some $150 million per day. According to analysts, 5.5 million Ukrainians, or about every eighth Ukrainian, own cryptocurrency. The country was determined to be a top nation for cryptocurrency adoption according to a Chainalysis report in 2020.
Some noteworthy innovations of the law “On Virtual Assets” are:
- The introduction of a conceptual apparatus (“virtual assets,” “financial virtual assets,” etc.)
- Requirements for service providers related to the circulation of virtual assets, settlement of issues of a public offering of virtual assets
- Fines for violating the provisions of the law, and so on
The law is largely a framework law and requires further substantial refinements, for instance, changes to the tax code. Nevertheless, the document became an important signal to the global community since the National Bank of Ukraine officially stated that digital currency is a “monetary surrogate, which has no real value.”
There are a few countries where the authorities are completely loyal to cryptocurrencies. Ukrainians understood faster than others how to build a business on a cryptocurrency. Ukrainian legislators were able to pick up the cryptocurrency trend quickly.
The Ministry of Digital Transformation of Ukraine plans to make the country a leader in the global cryptocurrency market. Adopting the law “On Virtual Assets” is an important stage in forming a transparent bitcoin trading system in Ukraine. By creating a high-tech, innovative bitcoin market that plays by clear rules, the country expects the speedy arrival of bitcoin investors from all over the world.
Ukraine is among the top-five cryptocurrency leading countries, according to a Telegram message from Mykhailo Fedorov, the minister of digital transformation in Ukraine. As noted above, the daily volume of transactions with virtual assets in Ukraine is estimated to be worth $150 million. The capitalization of virtual assets there is estimated to be worth more than $2 billion. At the same time, the market forcefully remained in the “gray” zone for a long time due to the lack of a sectoral legislative framework.
Now, a vast sector of the economy will come out of the shadows: the Ukrainian bitcoin market will gain clear rules of the game. Bitcoin exchanges and markets will be able to work officially. The bitcoin of Ukrainians will be protected from misuse or fraud. The opportunity to legally develop businesses in Ukraine will attract bitcoin investors from all over the globe to our country.
Adopting the law clearly signals to the global community that bitcoin is legalized in Ukraine. And this will allow us to make a serious leap and, most importantly, finish what we started.
This is a guest post by Sergey Tron. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.